March 27, 2026 — Global sugar prices retreated as data showed increased production in Brazil, the world’s largest producer, with mills diverting more cane toward sugar and away from ethanol.
May New York world sugar futures fell, while May London ICE white sugar also declined. The pressure followed a report from Brazilian industry group Unica showing cumulative sugar output for the 2025-26 season in the key Center-South region was up 0.7% year-over-year.
Production Shift in Brazil
Unica’s data, reported on March 27, indicated mills allocated 50.61% of crushed cane to sugar production for the season through mid-March, up from 48.08% during the same period last year. This shift contributed to total sugar production reaching 40.25 million metric tons.
This increase comes despite recent strength in crude oil prices, which had previously supported sugar markets. Higher oil prices typically boost ethanol values, encouraging mills to produce more biofuel and less sugar. On March 26, New York sugar futures had rallied to a 5.5-month high, partly driven by crude oil reaching a 3.75-year peak.
Broader Market Context
The price movement occurs within a complex global supply picture. Earlier in March, sugar prices had plunged to 5.5-year lows on concerns about a persistent surplus. Multiple analyst groups have forecast continued oversupply.
On February 27, the International Sugar Organization (ISO) projected a global sugar surplus of 1.22 million metric tons for the 2025-26 season. The ISO attributed this to increased production in India, Thailand, and Pakistan, forecasting a 3.0% yearly rise in global output.
Other analysts provided similar assessments. Czarnikow projected an 8.3 million metric ton surplus for 2025-26, while Green Pool Commodity Specialists estimated a 2.74 million metric ton surplus for the same period.
India’s Influence on Supply
India, the world’s second-largest sugar producer, is also contributing to market dynamics. The Indian Sugar and Bio-energy Manufacturers Association (ISMA) reported on March 24 that the country’s sugar output from October 1 to March 15 was up 10.5% year-over-year.
ISMA also reduced its estimate for sugar diverted to ethanol production, a move that could free more sugar for export. On February 13, India’s government approved an additional 500,000 metric tons of sugar for export for the 2025-26 season.
Logistical and Geopolitical Factors
Some supportive factors remain in the market. According to Covrig Analytics, the closure of the Strait of Hormuz has constrained approximately 6% of the world’s seaborne sugar trade, limiting refined sugar output in some regions.
Longer-term projections from the U.S. Department of Agriculture, in a report released December 16, forecast global 2025-26 sugar production climbing 4.6% to a record high. The USDA’s Foreign Agricultural Service predicted record production in Brazil and a significant increase in India.
For more information on global agricultural trade data, visit the USDA Foreign Agricultural Service. Market participants can also monitor official reports from the International Sugar Organization.
Market Outlook
The immediate price direction appears tied to the balance between Brazilian production decisions and broader global supply forecasts. While logistical disruptions provide some price support, the prevailing analyst view of ample supply continues to weigh on the market. Traders are monitoring whether sustained high crude oil prices will eventually prompt Brazilian mills to reverse course and favor ethanol production again.
This article was produced with AI assistance and reviewed by our editorial team for accuracy and quality.
